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Prime Minister John Key has come under fire in Parliament today
over illegal breaches of security by the Government's spy agency in
the Kim Dotcom case.

Labour leader David Shearer repeatedly asked Key if he stood by
his previous statement, including not knowing who Kim Dotcom was
until the day before police stormed his Coatesville mansion.

Shearer broughout out a blown-up photo of a fireworks display
Kim Dotcom commissioned when he was granted New Zealand residency
in late 2010 to "jog" Key's memory.

"I stand by my full statements in the context in which they were
given," said Key.

Key maintained he was not briefed about the security breach
until yesterday afternoon when the information came to light.

It has been revealed that the Crown's foreign intelligence
agency, the Government Communications Security Bureau (GCSB),
unlawfully intercepted information in the lead up to the police
raid at Dotcom's mansion.

Court documents released this afternoon say a police agency
sought the help of the Government spy agency the GCSB to track down
Kim Dotcom and his associates prior to a raid on his Coatesville
mansion.

The documents also show the agency OFCANZ, the Organised and
Financial Crime Agency of New Zealand, gave the GCSB an assurance
that all those being targeted were foreign nationals.

The GCSB is responsible for monitoring communications of foreign
nationals, and can't monitor New Zealand residents or citizens.

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That is the role the SIS, which requires a warrant from the
Prime Minister to do so.

English knew a month earlier

Earlier today, the Prime Minister revealed that Deputy Prime
Minister Bill English was aware of a Government agency's
involvement in the Kim Dotcom case over a month before he was.

Key said English had signed a ministerial certificate while the
Prime Minister was overseas in the United States to watch his son
play baseball in August.

''There was a ministerial certificate that was signed. That's
another technical issue, I haven't actually seen the paper work on
that, that would have indicated that the bureau was involved,'' Key
told media this morning.

"A ministerial certificate is in relation to information about
whether the bureau has acted, because a court, or someone might
ask, for that information. So, it's essentially a suppression
order."

English said today that he "was involved in an administrative
procedure related to the court".

"How all that fits in I'm sure will be covered in the inquiry
that the Prime Minister initiated," English said.

The Finance Minister said he could not recall the contents of
the documents, and he said he preferred not to comment further
"because of the risk of misleading people or giving the wrong
information".

After Key was told about the breach, he said the matter was then
referred on to the Inspector-General Hon Paul Neazor - the
independent authority charged with investigating any illegal
breaches by the Government's intelligence agency.

Labour leader David Shearer said his understanding was that the
Finance Minister "had signed the indemnity order", which puts New
Zealand "completely responsible for any suit that might arise from
this".

"That means that if anything goes wrong and Kim Dotcom decides
to sue, the US is not going to be held responsible, only New
Zealand,'' he said.

Key said he only found out about the GCSB's unlawful actions on
Monday when the agency advised him. The agency had discovered it
had acted unlawfully five days prior to that.

'A shambles'

Internet NZ Chief Executive Vikram Kumar told TV ONE's Breakfast
how the GCSB could not figure out that Dotcom and his co-accused
are New Zealand residents is beyond him.

"You just have to sit there and shake your head the whole Kim
Dotcom case is turning into a bit of a shambles for everyone," he
said.

"Starting right from the beginning where you had the police
raids on his house, you had the search and seizure being held to be
unlawful, seizure of his property being a procedural error and you
just have to sit there and say what on earth is going on here."

Kumar said that the Inspector General's report into the unlawful
bugging needs to be made public.

"We really need to know and get to the bottom of this. The PM
assures us that it happens very rarely and that he is 'quite
shocked', but I think that the report out of this must absolutely
be made public so we do get a better sense of trust and assurance
that the GCSB is working within its jurisdiction."

Kumar said the case is not a good look for the country with the
news of the illegal bugging hitting the headlines overseas.

"This isn't the story we want overseas about doing business in
New Zealand," he said.

Meanwhile, privacy and law expert Tim McBride says a much more
extensive inquiry is needed when the Dotcom case is over.

"I'm certainly one who thinks in the post 9/11 environment that
our agencies are directed from Washington DC," he said.

McBride says the latest development in the case is bound to have
wide reaching consequences.

He says the incident raises a number of credibility issues.

"If it's happened in this case you have to wonder if it's
happened in other cases because this sort of behaviour has a
chilling effect."